Ornstein v. Bank of America ( 2017 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
IAN NEAL ORNSTEIN, Plaintiff/Appellant,
v.
BANK OF AMERICA, N.A., et al., Defendants/Appellees.
No. 1 CA-CV 16-0220
FILED 4-20-2017
Appeal from the Superior Court in Maricopa County
No. CV2015-052615
The Honorable Robert C. Houser, Jr., Judge (Retired)
AFFIRMED
COUNSEL
Ian Neal Ornstein, Tucson
Plaintiff/Appellant
Bryan Cave LLP, Phoenix
By Sean K. McElenney, Gregory B. Iannelli
Counsel for Defendant/Appellee, Bank of America, N.A.
ORNSTEIN v. BANK OF AMERICA et al.
Decision of the Court
Quarles & Brady LLP, Phoenix
By Scott A. Klundt, Sarah R. Anchors
Counsel for Defendants/Appellees, Select Portfolio Servicing, Inc. and Bank of
New York Mellon
MEMORANDUM DECISION
Judge Margaret H. Downie delivered the decision of the Court, in which
Presiding Judge Diane M. Johnsen and Judge James P. Beene joined.
D O W N I E, Judge:
¶1 Ian Neal Ornstein appeals the dismissal of his complaint
against Select Portfolio Servicing, Inc. (“SPS”), Bank of New York Mellon
(“BONY”), and Bank of America, N.A. (“BOA”). For the following
reasons, we affirm.
FACTS AND PROCEDURAL HISTORY1
¶2 In 2006, Ornstein obtained a loan from Soma Financial,
which was evidenced by a promissory note secured by a deed of trust on
residential property in Tucson (“the Property”). The loan was assigned to
BOA. BOA later declared the loan in default and transferred its servicing
rights to SPS.
¶3 A trustee’s sale was scheduled for April 7, 2015. The notice
of sale listed BONY as the beneficiary of the deed of trust. On April 3,
Ornstein filed an action in Pima County Superior Court seeking to enjoin
the trustee’s sale. The superior court denied Ornstein’s request, and the
Property was sold to BONY on April 7 pursuant to a trustee’s deed.
1 We assume the truth of the well-pleaded factual allegations in the
complaint. Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, 419, ¶ 7 (2008). In
reviewing the superior court’s dismissal order, we may consider public
records and documents central to the complaint. Strategic Dev. & Constr.,
Inc. v. 7th & Roosevelt Partners, LLC, 224 Ariz. 60, 64, ¶¶ 13–14 (App. 2010).
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ORNSTEIN v. BANK OF AMERICA et al.
Decision of the Court
¶4 Ornstein filed a complaint against SPS, BONY, and BOA
(collectively, “Defendants”) for wrongful foreclosure, declaratory
judgment, and injunctive relief. Defendants moved to dismiss pursuant to
Arizona Rule of Civil Procedure 12(b)(6), arguing Ornstein’s claims were
barred because he did not obtain an order enjoining the trustee’s sale. See
Ariz. Rev. Stat. (“A.R.S.”) § 33-811(C). After briefing and oral argument,
the superior court granted Defendants’ motion and later entered a final
judgment. Ornstein timely appealed. We have jurisdiction pursuant to
A.R.S. § 12-2101(A)(1).2
DISCUSSION
¶5 We review a dismissal order under Rule 12(b)(6) de novo.
Coleman v. City of Mesa, 230 Ariz. 352, 355, ¶ 7 (2012). Section 33-811(C)
provides, in pertinent part:
The trustor, its successors or assigns, and all persons to
whom the trustee mails a notice of a sale under a trust deed
pursuant to § 33-809 shall waive all defenses and objections
to the sale not raised in an action that results in the issuance
of a court order granting relief pursuant to rule 65, Arizona
rules of civil procedure, entered before 5:00 p.m. mountain
standard time on the last business day before the scheduled
date of the sale.
Under this statute, a trustor who does not obtain injunctive relief before a
trustee’s sale occurs waives “pre-sale defenses or objections” to the sale,
BT Capital, LLC v. TD Serv. Co. of Ariz., 229 Ariz. 299, 301, ¶ 11 (2012), as
well as “claims that are dependent on the sale.” Morgan AZ Fin., L.L.C. v.
Gotses, 235 Ariz. 21, 23–24, ¶ 7 (App. 2014). A trustee’s sale, however,
does not “deprive the trustor of the ability to pursue claims or defenses
that are independent of the sale.” Morgan, 235 Ariz. at 24, ¶ 8; Sitton v.
Deutsche Bank Nat’l Tr. Co., 233 Ariz. 215, 218, ¶ 13 (App. 2013).
2 Ornstein’s opening brief does not comply with Arizona Rule of Civil
Appellate Procedure 13(a)(7). Unless a brief is “totally deficient,”
however, we prefer to decide a case on its merits. Adams v. Valley Nat’l
Bank of Ariz., 139 Ariz. 340, 342 (App. 1984). We address Ornstein’s
arguments as we understand them, but treat issues that are unsupported
by adequate explanation, citations to the record, or legal authority as
waived. See In re Aubuchon, 233 Ariz. 62, 64–65, ¶ 6 (2013).
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ORNSTEIN v. BANK OF AMERICA et al.
Decision of the Court
¶6 Count one of Ornstein’s complaint, entitled “Wrongful
Foreclosure/Rescission/Injunctive Relief,” asserted defenses and
objections to the trustee’s sale that are clearly barred by A.R.S. § 33-811(C).
Count two sought a declaratory judgment regarding the “true holder of
the obligation,” “the correct Trustee and Beneficiary,” the validity of
various trustee sale notices, pre-sale loan modification rights, Defendants’
standing to foreclose, and Ornstein’s default status. These claims are
premised on the notion that the trustee’s sale was invalid; as such, they
are barred by § 33-811(C). Finally, count three of the complaint sought to
enjoin Defendants from evicting Ornstein or recording documents based
on the trustee’s sale. As a collateral attack on the trustee’s sale, the
requested relief is barred by § 33-811(C).
¶7 For the first time on appeal, Ornstein raises several
additional claims neither alleged in his complaint nor asserted in the
superior court, including lack of notice and expiration of the statute of
limitations. “We do not consider arguments raised for the first time on
appeal except under exceptional circumstances.” In re MH 2008-002659,
224 Ariz. 25, 27, ¶ 9 (App. 2010). Ornstein has identified no exceptional
circumstances that warrant consideration of his new arguments.3
CONCLUSION
¶8 We affirm the judgment of the superior court. SPS and
BONY request an award of attorneys’ fees incurred on appeal pursuant to
the deed of trust and A.R.S. § 12-341.01. We grant their request based on
the deed of trust and will award a reasonable sum of fees, as well as
taxable costs, upon compliance with Arizona Rule of Civil Appellate
3 Moreover, § 33-811(C)’s waiver provision applies to trustors who
receive notice of a sale in time to seek an injunction, see Madison v. Groseth,
230 Ariz. 8, 12–13, ¶¶ 11–12 (App. 2012), which clearly occurred here.
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ORNSTEIN v. BANK OF AMERICA et al.
Decision of the Court
Procedure 21. We also award BOA its taxable costs on appeal, contingent
on compliance with Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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